The Impact Of Financial Development On Farmers' Income In Shandong

The problem of "agriculture,countryside and farmers" has been a high concern of the state and the government.After the party's the sixth Plenary Session of the 18 th CPC Central Committee,the upsurge of studying and carrying out the spirit of the six plenary session has been rapidly lifted.The meeting stressed that Party members of all departments learn The plenum until to understand,and lead the people to do the three rural work well.As a big agricultural province in China,the problems of Shandong province of the countryside,agriculture and farmers are related to the stability of political,economic and social and ecology,the core of which is the increase of farmers' income.Since the reform and opening up,economic and financial development is very rapid in Shandong province,but the development of rural economy is relatively backward in urban areas.Rural economic and financial development is closely related to the level of farmers' income,so the study on rural financial development to improve the farmers' income is very important.Based on the provincial data of national scope,many domestic and foreign scholars have studied the relationship between the rural finance and the income of the farmers,but the data they used is broad,it can not reflect the specific situation of our country in a certain area.Due to the current the imbalance of regional economic development in China,it is necessary to study the relationship between them.The paper uses time data of Shandong province and panel data of 17 cities to analyze the relationship between financial development and income increase of farmers.this study not only enriches the theoretical system of interaction between the two,but also provides some suggestions for the direction and way of economic and financial development in Shandong province and all over the city.On the basis of the studies of domestic and foreign scholars on the impact of Rural Finance on Farmers' income,firstly,this paper describes the current situation and the theoretical basis of financial development and farmers' income and the influence mechanism of financial development on Farmers' income increase.Secondly,using the data from 1978 to 2015 in Shandong Province,applying unit root test,co-integrationanalysis,Granger causality test and impulse response function method by econometric software tools STATA13.1,the paper studies the impact of financial development on Farmers' income.Finally,using panel data from 1997 to 2015 in Shandong,applying panel threshold model,this paper examined the relationship between the financial development level and the income increase of farmers in different regions.The paper is divided into five parts:Part one: introduction.It describes the research background and research significance,and it systematically reviews and summarizes the domestic and foreign scholars on financial development and the income growth of rural residents and the current development situation.Also,it summarized the research method and innovation point of the framework,from the overall grasped.The second part: theoretical basis and development status.Firstly,the paper expounds the theoretical basis of rural financial development,and it introduces the development status of Shandong province.Secondly,this paper expounds the theory of farmers' income,and it investigates the current situation and the development trend of farmers' income in Shandong province from 1978 to 2015.Finally,based on the previous theoretical basis and current situation,this paper analyzes the influence way of financial development on Farmers' income increase,namely: by increasing the investment of fixed capital,the development of rural finance can increase the income of farmers' family operation;by transferring of rural surplus labor force,it can increase the wage income of farmers;by increasing fiscal expenditure,it can increase farmers' property and transfer income.The third part: the empirical analysis of the overall situation of Shandong province.Starting from the time series,using the unit root test,co-integration test,Granger causality test and impulse response analysis,this part examines the effect of rural financial development to increase farmers' income.The analysis shows that there is a co-integration relationship and reciprocal causation between financial development and farmers' income in Shandong Province,The measure of financial development savings rate has a significant positive effect on Farmers' income;but credit ratio of the financial development has brought negative effect.The fourth part: analysis on the difference of panel threshold in different cities.Applying the panel threshold model proposed by Hansen in 1990,using the panel data of17 cities in Shandong Province during 1997-2015,this part discusses the regional differences of how financial development affects the Farmers' income.The analysis shows that there is uneven development in Shandong Province.When the degree of financial development is lower than the first threshold of 1.031,the impact of financial development on Farmers' per capita net income is negative;when the degree of development is located at 1.031 and 1.367 between two thresholds,the effect is not significant;when the degree is greater than the second 1.367,the effect is positive.From the data of the recent year,the financial development of Zaozhuang still has an inhibitory effect on Farmers' income.The fifth part: important conclusions and recommendations.Based on the theoretical and empirical analysis of the previous chapters,this chapter summarizes the important conclusions and puts forward some policy recommendations for further research in Shandong province.